Items filtered by date: Saturday, 09 June 2018
Africa’s largest fishing company Oceana Group faces a battle to hold onto its fishing rights in Namibia after the southern African country said listed firms would no longer be awarded quotas.
 
Bidvest Namibia, which is listed on Namibia’s stock exchange, could also lose its local fishing rights after the policy shift outlined in a government document reviewed by Reuters.
 
Oceana, which is listed on South African and Namibian exchanges and also operates in Angola and the United States, said it hoped its investments in Namibia would be safe as they were structured to include local shareholders. Ownership and hence citizenship in a company listed on a stock exchange changes by the hour, hence this legal requirement cannot be met by listed companies.
 
Bidvest Namibia’s Chief Executive Officer Sebby Kankondi did not respond to a request for comment. Fishing is the third-biggest contributor to Namibia’s gross domestic product, after mining and agriculture. It contributes around N$10 billion ($783 million) in foreign-currency earnings annually.
 
Namibia’s Fisheries Minister Bernhard Esau said the government wanted to bar listed firms from applying for fishing rights because it could not easily monitor whether they were owned by Namibian citizens, as required by law.
 
“Ownership and hence citizenship in a company listed on a stock exchange changes by the hour, hence this legal requirement cannot be met by listed companies,” Esau said in the government document seen by Reuters.

Zaida Adams, an investor relations executive at Oceana, said the company’s Namibian partners would apply for fishing rights and that therefore the government’s new approach was not a major risk. Bidvest Namibia had already announced plans to exit fishing locally after the government cut its quota three years ago.

The government has set July 31 as the deadline for applications for fishing rights.

 
Source: Reuters
Published in Business
The mines minister of the Democratic Republic of Congo has disclosed the country’s prime minister has sign into law the regulations to immediately implement a new mining code without any concessions to industry demands that key provisions be amended.
 
The move could set off a legal battle between the government and major mining companies operating in Congo, including Glencore and Randgold, which threatened legal action against the government last week if their concerns about tax hikes and the elimination of exemptions were not addressed.
 
“The code will be applied as it was promulgated!” Mines Minister Martin Kabwelulu told Reuters in a text message.
 
A spokeswoman for Randgold, who has been handling media queries on behalf of seven of the largest foreign companies operating in Congo, did not immediately respond to a request for comment.
 
Kabwelulu said the regulations would first be adopted at a cabinet meeting on Friday and then signed by Prime Minister Bruno Tshibala in the evening, adding that “the application of the code will be immediate!”
 
The new code scraps 10-year protections for existing projects against changes to the fiscal regime, imposes a windfall profits tax and increases royalties. Congo is Africa’s top copper producer and the world’s leading miner of cobalt.
 
Source: African News
Published in News Economy
South Sudan has agreed with its northern neighbour Sudan to repair oil infrastructure facilities destroyed by conflict within three months to boost production in Africa’s youngest country.
 
Michael Makuei Lueth, South Sudan’s information minister, told Reuters officials agreed with their visiting Sudanese counterparts to “evaluate and assess the damage” to South Sudan’s oilfields in the Heglig area in the country’s north.
 
“There is an agreement between the two oil ministries of the two countries. They agreed to cooperate and work together in order to repair (the damage),” he said.
 
South Sudan depends virtually entirely on oil sales for its revenue but production has declined since war broke out in the country in 2013.
 
The oil is shipped to international markets via a pipeline through Sudan. Fighting was triggered by a political disagreement between President Salva Kiir and his former deputy Riek Machar and a regionally brokered peace pact failed to end the war after violations by both parties.
 
Officials from the two countries “agreed that within the period of three months they will repair all the oil blocks and resume oil production in the region,” he said referring to the infrastructure in the oil blocks. The war has uprooted a quarter of South Sudan’s population of 12 million, ruined the country’s agriculture and battered the economy.
 
A joint force would also be established by both countries to protect the oilfields from attacks by both rebels forces in South Sudan and Sudan.
 
Source: Reuters
 
Published in Engineering

Zimbabwean President Emmerson Mnangagwa is putting money his government doesn’t have on the line to increase its 350,000 workers’ salaries as the country gears up for next month’s elections.

Mnangagwa has pledged that the July 30 elections, the first since Robert Mugabe was forced to step down in November after almost 40 years in power, will be free of the rigging and violence that marred previous votes. His ruling party’s chances of victory should get a lift from his promise to grant 15 pay rises to civil servants, who swallow up 90 percent of the government’s budget, and improve benefits for war veterans who fought white-minority rule.

“With the elections imminent and government workers a euphemism for party loyalists, the timing of the public sector wage hike proposals appear to be politically motivated,” Hasnain Malik, the Dubai-based head of equities research at Exotix Capital, said by email. “This is not an increase that the government can afford.”

Besides raising questions about the election’s credibility, the spending spree will hamper efforts to rebuild an economy shattered by a failed land reform program, hyperinflation and mass emigration. Mnangagwa, 75, is facing a challenge from Nelson Chamisa, 40, leader of the main opposition Movement for Democratic Change, in the presidential race.

The opposition has promised to scrap bond notes, introduced in 2016 as a form of currency, and compensate former white farmers who lost their land if it’s elected to rule. The MDC also said on Thursday its longer-term goal would be to join the rand monetary union and the Southern African Customs Union.

Warnings Unheeded

Zimbabwe’s wage bill equates to just under 20 percent of gross domestic product. Finance Minister Patrick Chinamasa, who was repeatedly overruled by Mugabe when he sought to curb bonuses and pay hikes aimed at bolstering dwindling government support, appears to be facing the same situation under Mnangagwa. While he cautioned at a conference in Harare last month that the pay increases will make the government’s already shaky finances even worse, his warnings have gone unheeded.

Containing the wage bill will require the government to drastically cut staff numbers, which wouldn’t be affordable under current labor laws, and they will have to be changed, according to John Robertson, a Harare-based independent economist. In the meantime, he expects spiraling labor costs to be a further drag on an economy that’s halved in size since 2000.

“We are already uncompetitive, so higher wages will make exports impossible,” Robertson said by phone from Harare.

Cash Shortages
Even without the latest salary increases, the government has been struggling to pay its workers on time as it contends with chronic cash shortages. Zimbabwe abandoned its own currency in 2009 to end hyperinflation, and has used mainly U.S. dollars.

While Zimbabwe has paid $110 million of arrears to the IMF, it’s still saddled with $1.7 billion in arrears owed to the African Development Bank and World Bank that it needs to clear before it can tap new loans from multilateral lenders. Zimbabwe’s total debt is expected to reach $14.5 billion this year, the Finance Ministry said in the budget.

Given that a credible commitment to fiscal deficit reduction is a key part of securing new funding, the proposal for big salary increases “is a negative development, taken in isolation,” Malik said

Credit: Bloomberg

Published in Economy

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